Chile

OECD recommends strengthening Chilean regions to boost the economy

27/07/09- Chile’s economy has strengthened over the last 20 years. Yet, to date Chilean regions have not been able to fully utilise their assets and reach their growth potential, limiting national capacity for growth. An OECD Territorial Review of Chile recommends that Chile adopt a stronger regional approach to economic development in order to better exploit opportunities and improve the country’s overall performance.

Improving productivity requires targeting innovation and entrepreneurship and improving education and training. These areas have an important regional dimension in view of the diversity of Chilean territories. At the same time, diversifying the national economic structure requires regionally-driven strategies, capable of mobilising regional resources and taking advantage of regional conditions.

Chile has progressively adopted an innovative regional perspective through initiatives such as the creation of regional development agencies and a regional innovation fund. And important reforms such as the direct election of the regional council and municipal reform are also on course.

However, Chile still lacks a regional institutional framework capable of co-ordinating, on a regular basis, the different policies, instruments, and actors involved in economic development. The regional economic agenda is still largely decided from the centre, while public investment mechanisms have a sectoral logic that hinders the financing of comprehensive and co-ordinated initiatives.

Moving towards place-based policies requires greater involvement of regional actors in planning and co-ordinating the regional development agenda. In this light, multi-level governance and co-ordination arrangements and mechanisms such as capacity building and strengthened participation schemes will help raise the legitimacy, coherence and effectiveness of the governance reform process in Chile.

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